Gross says the ECB has made promise after promise, after which it backtracks and waits for others to make the first move. He says the markets are past the point of patience with both the ECB and the Federal Reserve.
Once ratings agencies begin downgrading sovereign debt and the market stops trusting the economic recovery, the story is basically over. Creditors are losing trust in Spanish and Italian bonds, noting that ratings agencies are considering more downgrades.
Gross also said the Fed has made it impossible for investors in both stocks and bonds to earn adequate returns for the risks they are taking. Gross says the so-called cult of equities is dead because individual investors expecting to earn double digit returns and pension funds and insurance companies looking to recapture the 6.5% returns of a few years ago are continually being disappointed.

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